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April 11, 2011

3

Journal Star parent company “on verge saving itself from bankruptcy”

by Deena Winter

Today’s issue of the Wall Street Journal says Lee Enterprises — the Lincoln Journal Star’s Iowa-based corporate owner — is “on the verge of bankruptcy, foiling a group of its debt holders betting on a default.”

According to the WSJ, Lee has about $1 billion worth of debt (or six times its earnings) and has “long been high on the list of potential bankruptcies” but is preparing to sell junk bonds that would enable it to pay off its obligations and “give it a new shot at survival.”

The WSJ says “what is good news for the company has thwarted the plans of a flock of ‘vulture’ investors… which have been buying Lee’s loans.” The group was betting Lee would default and they could turn their holdings into an ownership stake, giving them access to the company’s assets (newspapers).

“Lee’s demise looked so inevitable that some of the investors even conferred two months ago to discuss the most favorable ways to restructure the company,” the WSJ reported. Lee took on most of its debt when it bought the Pulitzer chain of newspapers, led by the St. Louis Post-Dispatch, at precisely the wrong time.

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3 Comments Post a comment
  1. Jane H Kinsey
    Apr 11 2011

    No wonder LJS editors side with the powerful entities in Lincoln. They hope to save their own skin. Maybe they should consider the other side who has power if they choose to use it.

    Reply
  2. Fletch
    Apr 11 2011

    They don’t do it to save their own skin. They need something to do to collect a paycheck. And, why would they intentionally side with unpowerful entities anyway?

    The newspaper exists for one reason, and it’s nothing that noble. All the people that work for the newspaper (here or anywhere) will try to tell you how noble it is and take you back to the 1930’s with reporters wearing cool little hats, and photographers using flash bulbs. Maybe they were pioneers then. Today, they are not. The newspaper exists to make a profit. It can bring in a profit by having more revenue than it has expenses. If they expose a huge story somewhere along the way, that’s just icing on the cake. The only two ways for revenue are to a) sell subscriptions and individual papers to readers, and b) to sell advertising space. Thus, the idea is to sell enough advertising and raise enough subscription money that you can cover the costs associated with putting out a paper – like salaries, ink, paper, the building, office supplies, etc. It’s an archaic model that is on the verge of outliving its useful purpose. However, most of the people that work in the newspaper business don’t see it, or just ignore it. How many people sit around until tomorrow morning waiting to learn of the news that happens today? How many people still just sit around and wait until 10 pm for a drone to tell us about the news of the day? Generally by the time a “news” item hits the LJS, it’s anywhere from 12-36 hours old. If you pay any attention to news websites or Twitter feeds, you know the news. The same cannot be said for analysis/opinion, or certain features like “who to follow on Twitter” – but with the news, weather, and sports scores, it’s all very stale by the time it hits your doorstep.

    Reply
  3. in the real
    Apr 11 2011

    Maybe a little tif money would help yeah the city could give them g-tif of about a million to redo a parking lot, then next year they can turn around and sell it back to the city for 4.5 million for Arena parking… PLEASE PLEASE keep reporting your the only place I trust

    Reply

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